Local government is the most diverse of Australia’s three levels of government. It is an important player in the area of environment and heritage management in Australia, and has responsibility for protecting the environment, planning future landscapes, providing infrastructure, managing natural resources, and conserving or managing cultural heritage through a variety of mechanisms. Many local governments work in areas beyond statutory requirements, such as Local Agenda 21 and Cities for Climate Protection.

In 2002–03, local government collectively accounted for about $4.1 billion of spending on environmental management (Figure 39), which is about 32 per cent of the total environmental expenditure by the three levels of government across Australia. Most of this expenditure is for solid waste management and wastewater treatment. The income is funded primarily from rates (some 83 per cent of total local government funding in 2000–01), which can be inflexible in some of the poorer and smaller rural local government areas. The most extreme and poorly resourced examples are Indigenous councils.

The mechanics of local environmental governance are complex. Local government has many environmental and heritage roles and responsibilities, and carries these out according to legislation or policies or programmes (Sullivan 2006). This can create tensions because councils and the staff they hire consider themselves to be creatures and servants of the local areas. Instead of being driven by any specific statute, local governments use state and territory laws as toolkits to fix local problems, rather than as the instruction manuals intended by state governments.

This gap between the expectation and the reality is only one of a raft of pressures faced by local governments. Others include local government amalgamations, enhanced general roles and responsibilities, devolution, unfunded mandates and cost shifting, an increasing need to work with regional organisations, and population pressures from ‘sea change’ and ‘tree change’ movements (see ‘Human settlements’). For some, the pressure is sufficient to limit what they can do. A 2005 survey found that only 31 per cent of councils considered that they had a comprehensive or good capacity to take up natural resource management initiatives; 29 per cent said they had either a limited capacity or none (Figure 40). An April 2004 report, Making Heritage Happen, found that on the basis of partial evidence offered at the local level, it is possible that current trends could lead to the loss by 2024 of 10–15 per cent of the heritage places that are extant in 2004 (National Incentives Task Force 2004).More recently, a Productivity Commission survey of the role of local governments in the conservation of historic heritage showed that around half of responding councils provided assistance, (ranging from 15 per cent of councils in Queensland to more than 80 per cent in New South Wales) with free heritage advisory services and grants being the main forms of assistance (Productivity Commission 2006b).

Local governments in the Northern Territory and Queensland face these problems and more. Many govern largely Indigenous communities, and play an important role in helping to manage the cultural heritage of their local populations. A total of 93 Indigenous local councils have been established in the Northern Territory (as at October 2005) and, overall, 650 of the 815 elected members are Indigenous people.

The increasing need to work with regional organisations is a challenge for local governments. One reason is that various organisations have different boundaries, depending on their needs, and they rarely coincide with each other or with local government boundaries. The challenge is greater for local governments that straddle regional borders because they can find themselves having to work with more than a dozen regional organisations. This can create barriers to effective long-term local–regional partnerships. The problems also include both the transience of regional bodies and their frequently unclear roles in relation to local government (Dore and Woodhill 1999, Bellamy et al 2003).